agricultural lending institutions commercial banks farm credit system farm services adm. insurance...
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AGRICULTURAL LENDING INSTITUTIONS
• COMMERCIAL BANKS• FARM CREDIT SYSTEM• FARM SERVICES ADM.• INSURANCE COMPANIES• INDIVIDUALS• INPUT SUPPLIERS
COMMERCIAL BANKS
• IN 2002, FARM BUSINESS DEBT PROVIDED BY COMMERCIAL BANKS ACCOUNTED FOR 17.6% OF REAL ESTATE DEBT AND 21.8% OF NON REAL ESTATE DEBT.
AGRICULTURAL BANKS• 1987 ==> 4480 AG. BANKS 1999==> 2942 AG. BANKS• 1994 ==> 3548 AG. BANKS 2001==> 2744 AG. BANKS• 1995 ==> 3363 AG. BANKS 2002==> 2644 AG. BANKS
WHAT IS AN AG. BANK?FEDERAL RESERVE DEF.A BANK THAT HAS AN AG. LOAN RATIO GREATER THAN THE AVERAGE FOR ALL COMMERCIAL BANKS.
ON 6/30/02 14.97%
FARM CREDIT SYSTEM• THE FARM CREDIT SYSTEM (FCS) IS
MADE UP OF FOUR REGIONAL FARM CREDIT BANKS.
• THESE BANKS PROVIDE FUNDS FOR PRODUCTION CREDIT ASSNS. (PCAs), FEDERAL LAND BANKS ASSNS. (FLBAS), AGRICULTURAL CREDIT ASSNS. (ACAs), AND FEDERAL LAND CREDIT ASSNS. (FLCAs).
• REGULATED BY THE FARM CREDIT ADM., WHICH IS AN INDEPENDENT AGENCY OF THE FEDERAL GOVT.
As of July 1, 2004, the System was composed of the following lending institutions:
Four Farm Credit Banks (FCBs) that provide loan funds to 79 Agricultural Credit Association (ACAs), and 11 Federal Land Credit Associations (FLCAs). ACAS make short-, intermediate-, and long-term loans and FLCAs make long-term loans.
One Agricultural Credit Bank (ACB), which has the authority of an FCB and provides loan funds to 5 ACAs. In addition, the ACB makes loans of all kinds to agricultural, aquatic, and public utility cooperatives and is authorized to finance U.S. agricultural exports and provide international banking services for farmer-owned cooperatives.
• THE FARM CREDIT SYSTEM ACCOUNTS FOR 20.0% OF REAL ESTATE LOANS AND 10.3% OF NON REAL ESTATE LOANS.
• FUNDING IS OBTAINED BY SELLING BONDS IN THE MONEY MARKETS.
TEXAS BANK
• 13 Ag Credit Assns.• TOTAL LOANS AS OF SEPT. 30, 2014 ==>
$12.704 BILLION
• THERE HAS BEEN CONSIDERABLE CONSOLIDATION OF PCAs AND FLBAs IN THE PAST FEW YEARS
FARM SERVICES ADM.
• THE FARM SERVICES ADM. (FSA) WAS FORMERLY THE FARMERS HOME ADM. (FmHA).
• ACCOUNTS FOR 1.7% OF REAL ESTATE LOANS AND 1.8% OF NON REAL ESTATE LOANS.
• HAS BEEN DECREASING IN AMOUNT OF CREDIT PROVIDED.
DEBT (MIL $)
DIRECT GUARANTEED1986 2807.9 1569.1
1990 921.3 1271.9
1995 563.6 1938.3
1999 1288.9 2550.4
2000 1048.1 2674.1
2001 943.6 2314.9
2002 903.6 2650.9
DELINQUENT LOANS (%)
DIRECT GUARANTEED 1986 31.9 5.6
1990 26.9 4.6
1995 27.1 3.9
2000 15.5 4.5
2001 15.2 4.6
2002 15.9 5.9
LIFE INSURANCE COMPANIES
• ACCOUNTS FOR 6.1% OF REAL ESTATE LOANS.
• ONCE WERE MAJOR LENDERS IN THE AGRICULTURAL REAL ESTATE MARKETS.
INSURANCE COMPAYIES CURRENTLY ACTIVE IN
AGRICULTURAL LENDING ARE:
AEGON-USACItigroup InvestmentsAgriFinanceLend Lease Agri-BusinessMetropolitan LifeMONY Life InsurancePrudential
INDIVIDUALS AND OTHERS• ACCOUNTS FOR 9.6% OF REAL ESTATE
LOANS AND 11.2% OF NON REAL ESTATE LOANS.
• NON-TRADITIONAL LENDERS
-- JOHN DEERE
-- FORD NEW HOLLAND
-- PIONEER HI-BREEDS
LEASING AND FINANCING OF
EQUIPMENT AND SUPPLIES.
FARMER MAC
• FEDERAL AGRICULTURAL MORTGAGE CORP.
• PROVIDES A SECONDARY MARKET FOR AGRICULTURAL LOANS.
• POOLS FARM MORTGAGE LOANS AND SELLS THEM TO INVESTORS.
• SIMILAR TO THE GNMA MARKET.